Chittagong is the largest port and second largest city in Bangladesh with 6.5 million citizens. Chittagong is also an area where many tanneries operate (yet less than before) and where the commerce of leather has for long suffered from a wide crisis and stress.
Wide crisis and stress in Chittagong
The situation as told by thedailystar.net, shows that “Raw hides operators in Chittagong demand loans with convenient terms to recover their losses”. Why are they recording losses? Simple: inability to keep up with competitors: 50% of tanneries working in Chittagong either shut down or went bankrupt. With no local clients and many raw hides, sales prices decreased rapidly, and profits disappeared.
Subsidized loans
According to the Chittagong Rawhide Warehouse Traders Association, there used to be 22 active tanneries in the area until a few years ago, and today only half remain. This condition forces tanneries to sell goods to clients in Dhaka, but they in term demand substantial discounts and buy less volumes. The result: full warehouses and hides sold for nothing. “The majority of products must be sold in Dhaka – says Moslem Uddin, president of the association -. There is no competitive market in Chittagong. Many entrepreneurs are shutting down their businesses due to the financial crisis. They will be able to restart production only if the government will ensure subsidized loans are given to them”.
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